Murky Guidance Undermines CFTC's Derivatives Plans

Law360, New York (July 12, 2013, 6:28 PM EDT) -- The U.S. Commodity Futures Trading Commission on Friday finally detailed its plans to regulate U.S. derivatives trading overseas, but Wall Street attorneys warned of a backlash and even potential litigation as clients struggle to untangle the guidance to determine which deals fall under which jurisdictions.

The CFTC voted 3-1 to approve the guidance, which lays out the details of a Thursday agreement between the agency and the European Commission. Under the deal, the CFTC will apply Dodd-Frank Act trading requirements to cross-border transactions but will allow...